11-01-2014, 11:29 AM
Manufacturing System Design Case Study: Multi-Channel Manufacturing at Electrical Box & Enclosures
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ABSTRACT
Electric Box & Enclosures (E-Box), a small regional man-
ufacturer of electrical enclosures, was started in 1988 with a
few machines in a 5000 sq ft preengineered building. By
1997, sales had reached $8 million, the facility had expand-
ed to 75,000 sq ft, and the product line had grown. A pro-
duction focus to satisfy sales growth, together with facilities
and equipment additions, set the stage for material flow and
inventory problems: although 1.5% of the SKUs (stock keep-
ing units) comprised over 60% of demand, E-Box was still
organized around a process layout to serve the original job
shop manufacturing system. A plan was developed to reengi-
neer the manufacturing system at E-Box considering a flow
shop or cellular manufacturing system design. The final man-
ufacturing system would need to be flexible to accommodate
day-to-day product-mix variability; what was devised was a
modified cellular manufacturing design approach called
Multi-Channel Manufacturing (MCM). The test implementa-
tion of MCM at E-Box reduced throughput time by over 67%
and work-in-progress by at least 50%, virtually eliminated
quality problems, and increased production capacity to meet
rising demand. Moreover, by reducing promised delivery
time, service to customers was emphasized as a way to dif-
ferentiate E-Box in the commodity market. In the first full year
of partial MCM operation, sales have grown more than 11%
(to $9 million) while reducing the number of personnel by
25%. This paper is a case study of the experiences with
MCM at E-Box.
Background
Electrical Box & Enclosures, Inc. (E-Box) is a
regional manufacturer of Underwriters Laboratories
Inc. (UL) listed electrical enclosures for use in com-
mercial and industrial applications. Electrical enclo-
sures protect electrical controls, circuits, motor con-
trols, and wiring from exposure to weather, haz-
ardous environments, contact with people and ani-
mals, and other safety-related uses. UL periodically
inspects the manufacturing processes, procedures.
Description of Initial Manufacturing
System
The manufacturing process at E-Box is fairly sim-
ple. Sheets of metal must be sheared to the correct
size, and notches and holes are punched, which
allows the metal to be bent into an enclosure. The
enclosure then proceeds through welding and grind-
ing (multiple passes for some products), and then
the enclosure is assembled (with painting being an
option). Figure I depicts the process flow at E-Box
for one of the product families, the painted galvaneal
product family.
Initial Reengineering Efforts at E-Box
As mentioned earlier, the initial reengineering
proposal was whether or not to add a new flexible
manufacturing system (FMS) that would combine
metal shearing, punching and notching, and pressing
and bending into one process step. Such an FMS
would cost approximately $2M. The company also
felt that by adding a warehouse it could store more
finished goods to increase responsiveness to cus-
tomers. Because lead time was a concern for the cus-
tomers, who viewed the enclosures as a commodity
product, E-Box felt that reducing lead time would
lead to increased sales. The goal was to reduce lead
time from its current level of anywhere between one
and seven days to a maximum of one day for com-
modity orders.
Conclusions
Multi-Channel Manufacturing (MCM) is a spe-
cific modification of cellular manufacturing.
It
involves forming cells with a new criterion: enhanc-
ing the flexibility of the cell in terms of which prod-
ucts the cell can produce on a daily, cost-effective
basis. (Our scope of flexibility is defined in Section
2.2.) We presented the MCM cells from Electric Box
& Enclosures, Inc. (E-Box) and discussed the results
from partial implementation. The results from E-
Box indicate that MCM was a success, with sales
increasing by over $1 million (an 11% increase) dur-
ing its first year of implementation, while reducing
the number of personnel by 25% (at an annual sav-
ings of approximately $500,000). Other measures of
improvement include a more than 67% reduction in
manufacturing lead time, a more than 50% reduction
in WIP, and substantial improvements in product
quality (in the form of less boxes arriving down-
stream with the wrong notches or bends). In sum-
mary, the reengineering effort, of which MCM was
a part, required a $30,000 to $50,000 investment and
yielded benefits of approximately $740,000 in the
first year.